Chapter 1: North America
Five young professionals sat around couches in the lobby to the auditorium of Schwartzmann Business School. They graduated from its MBA program three or four years ago, and today they were waiting to present their information technology start-up to a group of Phase C investors. The five of them looked sharp, and versatile, dressed in business suits, laptops and tablets and papers in hand. They had amongst themselves poets and quants, males and females, ambitious and cautious. Over last several years they perfected their skills in business analysis and communication and gained a deep understanding of their industry vertical.
They buzzed with nervous energy, their habitual exhaustion having abandoned them for the special occasion. However, they could still see in each other’s faces signs of many disrupted nights. Two of the team members even went out for a cigarette break just before the presentation, and the hacker of the team annoyingly decided to cope with the tension by playing online chess.
Soon enough they were called in to present. A seated audience of about eighty looked on as they wired the projector and arranged documents in preparation. Some used the break to browse the web on screens sticking up right below their faces; others hydrated from eco-friendly water containers. There were several professors and potential investors, who were the main judges and looking to risk significant sums of their personal wealth on a promising start-up. The rest of the audience were students who were granted the opportunity to learn from a real-life investment pitch. For grades, they were required to take good notes and ask clever questions. However, it was certain that many of them would ask dumb questions.
Browder, the leader of the team, opened up the presentation. WaterCooler was a three-year old start-up whose mission is to revolutionize reporting. It is a two-way platform where “Reporter” users are actual reporters, researchers, and investigators whose profiles list their permanent or current interests. “Source” users are anyone, often experts, who have and are looking to share valuable information on a topic or a current event. The key differentiator of WaterCooler is its blockchain technology, which seamlessly combines anonymity with accountability. First, it allows for verification of all sources to determine all confidentiality restrictions imposed upon them by the laws of the land, and it restrict them from releasing information in violation of such laws. This is done by encrypted AI rather than by human employees, and thus constitutes no breach of sources’ privacy. Second, a blockchain-powered process enables anonymous exchange of information and negotiation of the price to be paid to the source by the reporter. Through a sophisticated and encrypted escrow system, blockchain protects against both source and reporter fraud.
Swapping the screen remote amongst themselves under the PowerPoint projector, Browder and his colleagues explained further how WaterCooler has already raised $1.65 million dollars in previous investment rounds, which enabled the team to perfect the technology and obtain over 30,000 users. Furthermore, they obtained institutional clients among several newspapers, think tanks, and municipal governments. There is an international interest for the concept, evidenced by major clients and partners acquired the USA, Finland, Singapore, and Mauritius.
The questions were first opened to the student body.
- Don’t you think that Wikileaks already pretty much covers all there is to this need?
Jocelyn, the lawyer of the WaterCooler team, explained that Wikileaks often runs grossly against the law, while this application cooperates with governments to understand confidentiality laws and implement an air-tight blockchain system to eliminate illegal exchange of information.
- Can you tell us the average price a source is paid to share information on your platform? It seems that there may arise a laisse-faire trading in truth that could run counter to the WaterCooler vision of democratising information.
On the contrary, analysis of anonymous user data shows that reporters experience significant cost savings on WaterCooler in comparison to traditional investigative processes. Meanwhile, the financial incentive motivates sources who otherwise would decide to remain silent. It is important to keep in mind that most of the information on WaterCooler is concerned with regular reporting and academic research. There are no government spies or military whistleblowers trading secrets on the platform, and the blockchain ensures that these things cannot happen.
After a few easy rounds with the students, the word was given to the investors. Benjamin Rose, a quantum computing ace from the North West, indicated that he would like to be the first to talk by violently scratching the back of his head. The crude gesture didn’t surprise anyone in the room. In contrast to the meticulous suits around him, the man looked blissfully unkempt. His preoccupation with bringing about the singularity evidently caused him to neglect grooming, or working out, or noticing some of the newer clothing fashions. He leaned forward and started busily flipping through the printout in front of him.
- I took some time to familiarize with your software. Now I know there’s been so much recent hype about blockchain, but I am not a convert just yet. As the whole blockchain scales up, and as your particular business scales up, there are likely to arise inefficiencies. The environmental costs alone of running blockchain calculations increase exponentially with linear increase in task size, and in addition to that there is need for massive and decentralized computing power. And without centralization, it will be hard to reassure users that their privacy is indeed protected.
Ramon, the hacker and chess amateur, took a couple of steps towards Mr. Rose. Shoulders stiff, he muttered a little but then proceeded with a deferential but articulate answer. He mentioned a few local start-ups whose work is showing promise when it comes to incrementally lowering the efficiency issues of blockchain, and how WaterCooler’s IT team is in close contact with them, making sure that their software is at the cutting edge of efficiency. Then he mentioned how WaterCooler’s business concept is not welded to blockchain, so if in the future a next-generation computing technology becomes viable, for example quantum computing, WaterCooler should be able to transition to it without fundamental changes to the business premise.
It took another two hours of discussion inside the auditorium, and another three hours outside of it and over dinner, to give clarity to the investors and the academics interested in WaterCooler. Then it took another three months to secure funding from one of the investors while the other three backed out. Finally, it took two more years for WaterCooler to fail. As a consolation prize, an HR company bought a modified version of the software for use for a narrower application, and the five teammates used the cash to cover debts, boost mortgages, and in case of Browder, take a long European vacation.